The Creative Financing Bible: 12 Ways to Buy with No Money Down
Cash is not king. Terms are. This document shows you exactly how to structure deals with little to no money out of pocket.
LEGAL NOTE: These are real structures I've used. Always consult with your attorney and CPA before implementing. What works in one state may not work in another.
Structure #1: The Classic 90/10 SBA
90% SBA Loan + 10% Seller Note
How it works: SBA finances 90%, seller carries 10% on standby for 2 years.
| Purchase Price |
$1,000,000 |
| SBA Loan (90%) |
$900,000 |
| Seller Note (10%) |
$100,000 (standby 24 months) |
| Your Cash In |
$0 |
Script: "The SBA requires you to have skin in the game. If you carry 10% on standby, it shows them you believe in the business. Plus, you'll earn 8% interest when payments start in year 3."
✅ Success Rate: Works 7 out of 10 times with motivated sellers
Structure #2: The Asset Leverage Play
Equipment Financing + Working Capital Takeover
How it works: Finance equipment separately, take over working capital as down payment.
Real Example - Landscaping Company:
Purchase Price: $650,000
Equipment Value: $400,000 (financed at 85% = $340,000)
Working Capital: $150,000 (you keep this)
Seller Financing: $310,000 (5 years @ 6%)
Net Cash Needed: $0 (actually positive $150,000)
Structure #3: The Earnout Escalator
Low Fixed Price + Performance Earnout
How it works: Pay low upfront price, seller gets more if business grows.
| Component |
Amount |
Terms |
| Base Purchase Price |
$500,000 |
Seller financed over 5 years |
| Year 1 Earnout |
Up to $100,000 |
If revenue grows 10% |
| Year 2 Earnout |
Up to $150,000 |
If revenue grows 20% |
| Year 3 Earnout |
Up to $200,000 |
If EBITDA exceeds $300K |
Script: "I'll pay you $500K guaranteed, but if I grow this like I plan, you could make up to $950K total. You win if I win."
Structure #4: The Vendor Takeback Special
100% Seller Financing with Stepped Payments
How it works: Seller finances everything, payments start low and increase.
Payment Schedule:
- Year 1: $5,000/month (interest only)
- Year 2: $8,000/month
- Year 3: $12,000/month
- Year 4-5: $15,000/month
- Balloon payment: $200,000 at year 5
💡 Why Sellers Accept: They net more than a cash sale after broker fees and taxes
Structure #5: The Consulting Hybrid
Seller Stays as "Consultant" to Offset Price
Example:
- Purchase Price: $800,000
- Seller Consulting: $8,000/month for 24 months = $192,000
- Net Effective Price: $608,000
- Financed over 5 years: Only $10,133/month
WARNING: IRS watches these closely. Consulting must be legitimate with real duties.
Structure #6: The Inventory Offset
Use Excess Inventory as Down Payment
Perfect for: Distributors, retailers, manufacturers with bloated inventory
HVAC Parts Distributor Deal:
Listed Price: $1.2M
Inventory on Hand: $400K (but really worth $200K)
My Offer:
- I'll value inventory at full $400K
- But that's my down payment
- Finance remaining $800K
- I liquidate excess inventory post-close
Result: Bought business with $0 down, got $200K cash from inventory liquidation
Structure #7: The Customer Prepay Play
Get Customers to Fund the Deal
How it works: Offer customers discounts for annual prepayment
Real Example - Commercial Cleaning:
- 20 customers paying $2,000/month = $40K monthly revenue
- Offered 15% discount for annual prepay
- 12 customers prepaid = $244,800 cash
- Used as proof of funds + working capital
The Master Negotiation Framework
The 4-Step Seller Finance Conversion:
- Plant the Seed:
"Have you thought about seller financing? You'd net more than a cash sale after taxes."
- Show the Math:
"Cash sale: $1M - 10% broker - 30% taxes = $630K
Seller finance: $1M @ 8% = $80K/year passive income + principal"
- Address the Fear:
"I'll personally guarantee the note. Plus, you keep the business as collateral."
- Close with Optionality:
"Let's structure it so you can cash out anytime by selling the note."
Structures That DON'T Work (Avoid These)
- ❌ Balloon payments under 3 years - Too risky
- ❌ Revenue shares over 20% - Kills cash flow
- ❌ Personal residence as collateral - Never worth it
- ❌ Handshake deals - Get everything in writing
The Golden Rules
Rule #1: The business must cash flow from Day 1 after debt service
Rule #2: Never personally guarantee more than the purchase price
Rule #3: Always have an exit strategy before you enter
Rule #4: If the seller won't finance any portion, walk away
Your Next Steps
- Pick your favorite 3 structures from this document
- Practice the scripts until they're natural
- On your next deal, present 2-3 structure options
- Let the seller choose (they always pick one)
Remember: The seller's motivation determines the structure, not the business type. A motivated seller will accept creative terms. An unmotivated seller won't budge on anything.
© The Blueprint System™ - Creative Financing Bible
For seller motivation assessment, see Document #9